Interpret the following graph showing the potential changes, Ask an Expert

Economics

Interpret the following graph showing the potential changes in supply of money compared to the demand for money. The demand for money is represented by line MD and the initial supply of money is represented by line MS. Then answer the questions below.

Change in Interest Rates

Find the new equilibrium points

1. If there is no change in the interest rates, where is the equilibrium point? What is the interest rate?

2. If there is a decrease in the supply of money, where is the new equilibrium point? What is the interest rate?

3. If there is an increase in the supply of money, where is the new equilibrium point? What is the interest rate?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91403409

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